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Total Loss Appraisals – Your Totaled Car can still be Useful

Total Loss Appraisals – Your Totaled Car can still be Useful

In most cases, car owners find themselves in a haunting situation when their vehicle is seriously damaged, and the insurance companies refuse to pay the entire amount of the vehicle. It can be challenging for vehicle owners to fight for the right claim of their vehicle. When your vehicle is damaged severely, and the repair costs are greater than IDV or Insured Declared Value of the vehicle then this situation may present itself. You might also get introduced to new terms like “Total loss,” or your insurance agent might say that your car is “totaled.” This blog will discuss total loss and how total loss appraisals will help you recover your money when the insurance company defines your car as a total loss.

What is Total Loss?

total loss

A car is defined as a total loss when an unfortunate accident damages it adversely, and the total repair cost and salvage value exceed the insured worth of the vehicle.

Professional automobile appraisers from both ends will check the vehicle’s repair costs and determine the right cost of repairs in a detailed report. In the report, you will find the numbers like the cost of repairs, labor fees, and salvage price of the vehicle.

Car owners would worry about the fact that their car will take a lot of time or it will never stand on its wheels. At the same time, your insurer will try their best to declare your car a total loss to ensure that their company has to pay you less. They will check the vehicle’s ACV or Actual Cash Value prior to a collision before declaring your total loss.

Different States have different rules for total loss appraisals:

When the insurance company determines the total loss ratio, i.e., cost of repairs: Actual cash value, once they have the total loss ratio in their hand, they will check the total loss ratio with their internal compliance or with the state law. Most of the states in the United States have a percentage that describes how high a vehicle’s total loss ratio must be to declare it as a total loss to receive a salvage certificate from the authorities. It is often termed as “TLT” or Total Loss Threshold, which the total loss ratio must exceed. Some states don’t use TLT or Total Loss Threshold; hence they use TLF or Total Loss formula, which is mentioned below.

Total Loss Formula= cost of repair + salvage value > actual cash value of the vehicle.

To make things easy for you, we will fetch you the data of different states in a detailed table to make things easy.

Arkansas70%New Hampshire75%
CaliforniaTLFNew JerseyTLF
Colorado100%New MexicoTLF
ConnecticutTLFNew York75%
DelawareTLFNorth Carolina75%
Florida80%North Dakota75%
Indiana70%Rhode IslandTLF
Iowa50%South Carolina75%
Kansas75%South DakotaTLF
Minnesota70%West Virginia75%

From the above-mentioned stats, the chances of your car are declared as a total loss are higher in Iowa and Nevada as they have a TLT or Total Loss Threshold of 50% and 65%, respectively. At the same time, most of the states like California, Georgia, Hawai, and Washington use TLF or Total Loss Formula to declare a vehicle total loss. In Texas and Colorado, TLT is 100% which means the total cost of repairs + salvage repairs = Actual Cash value to define the car as a total loss.

How do insurance companies calculate total loss?

The ACV or Actual Cash Value is the total amount which your insurance agent will pay you when your car is totaled after a gruesome accident. The insurance carrier will find the vehicle’s actual cash value before the collision and subtract it from your deductible. There are three main numbers when your car is totaled they are,

  1. Actual Cash Value or ACV,
  2. Salvage value of the vehicle, and
  3. Cost of repairs.

Actual cash value or ACV:

The insurance company will calculate the ACV or Actual Cash Value of the car by evaluating the vehicle’s overall condition, an estimate of worth before collision, model, make, year, mileage, and vehicle options.

Salvage value:

The salvage value of a totaled vehicle or any other vehicle is calculated by understanding the resale value of its important parts and comparing it to the actual cash value of the vehicle.

Cost of repairs:

The adjuster can also take help from a certified mechanic to determine whether the cost of repairs is greater or lesser than the Actual Cash Value of the vehicle. If the total sum of salvage value and cost of repairs is greater than the actual cash value, then your vehicle is described as totaled.

What happens when your car is totaled without your fault?

In some total loss cases, the insurance will define your car as totaled despite not being the fault. If another driver is responsible for the accident, their insurance company will pay the totaled vehicle’s value. On the other hand, if your car has been damaged by a landslide or any other falling object, you must have comprehensive coverage insurance, which will pay the vehicle’s cash value.

The complete process when your car is totaled

In the first instance, your insurer might ask you to hand over the vehicle’s keys and ask you to remove any personal or valuable items from the vehicle. You will also have to contact your auto-financing company and let them know that your insurer will contact them. If you own the vehicle and it’s not on loan, then the insurance company will pay you the ACV of the vehicle. If you either leased or financed the vehicle, your insurance company will directly pay the vehicle’s ACV or total loss value to the financing company.

What happens if your car is on a loan?

Most car owners fear that if their car is determined as a total loss, then they might have to pay the debts of the loan. Well, it is only a rumor because your insurance company will settle the loan with the financing company. Therefore, it is important for car owners to get car insurance as it helps them in compensating for the lost financial value of the car. You can also buy the totaled vehicle back from the insurance agent if you are emotionally connected to the vehicle.

How can Total Loss Appraisals help you while Recovering Your Money?

Once your car is damaged or has undergone a major accident, the first thing your insurance company will bring is their professional appraiser, who will determine the total loss value of the vehicle. You are also open to bringing your own appraiser and raising a dispute if their appraiser reduces the vehicle’s worth. One of the best advantages of taking help from professional automobile appraisers is they work with a simple and straightforward strategy.

The professional appraiser will assess the damaged value of the vehicle and then estimate the cost of repairs and salvage value. If the total is higher than the actual cash value, then they will conclude their appraisal report as a totaled vehicle.

Total Loss Appraisals can help you during negotiation:

There are a majority of chances where you will feel that your insurance company is paying less than the worth of the vehicle. According to a recent survey, more than 65% percent of owners feel that insurance companies provide a biased claim to benefit their organization and the rest are happy that they are getting something out of a salvaged vehicle.

One of the best advantages of having car insurance is you can negotiate with your insurance company and demand a higher value if you ever feel that your car deserves its actual worth. There is only one way to get a higher value: you need to provide conclusive evidence to your insurance company and make them believe that your car owns a higher value when compared to their calculation. Total loss appraisals can help you in negotiating for a fair deal, and most importantly, you will get peace of mind that you are not compromising the worth of the vehicle. You have to also go for certified and highly-trusted professionals as they have the right experience to help you in fighting for the right claim.

Are you looking for Total Loss Appraisers in the United States?

If yes, then Benchmark Auto Appraisers LLC is the leading automobile appraiser across the United States. They are well-experienced in dealing with total loss appraisals and can help you in dealing with total loss vehicles. They have well-experienced appraisers who meet USPAP or Uniform Standard of Professional Appraisal Practice. They are the one-stop solution for all your vehicle appraisal needs in the United States of America. Get in touch with their experts at 1-877-888-6113 to book a free consultation.

Total Loss Appraisals – Your Totaled Car can still be Useful

Daniel “Dan” Jendrowski

Certified Public Auto Appraiser Diminish Value Experts B.C.A.A. & I.A.C.P.

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